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MORNING BID EUROPE - Private jobs on the spotlight amid data blackout
Ankur Banerjee gives us a look at what the future holds for European and global markets The markets are still recovering after a week of action packed events that have left the risk momentum intact. This week, the focus has shifted on a few private economic data that could shed light on the state of the U.S. labor market. The U.S. government shutdown is expected to continue, and there will no longer be any economic data from the government. So, no nonfarm payrolls, no JOLTS job openings. Investors will instead analyze private employment data provided by ADP in order to gauge the direction U.S. monetary policies. ADP's data will be released later this week. Investors are searching for answers due to a divided Federal Reserve. Fed Chair Jerome Powell shocked markets last week by expressing a hawkish attitude, suggesting that the recent rate reduction could be the final one of the year. Christopher Waller, the influential Fed governor, made a case for further policy easing on Friday to support a weakening labor market. CME FedWatch showed that traders are now pricing in only a 69% probability of a December rate cut, down from 90% one week ago. As Chinese stocks continue to fall, the afterglow from the much-anticipated trade truce has waned. This is the classic case of buying the rumour and selling the truth. Data released on Monday showed that China's factory output and new orders both declined amid the tariff fears. Meanwhile, big manufacturing hubs in other parts of the world also struggled to get going in October. Later in the session, markets will also be looking at similar reports from Europe. European futures indicate a higher opening, while the euro is hovering at a 3-month low. Powell's hawkish tones have helped boost the dollar, although analysts do not expect it to remain strong for very long. They suggest that data will soon reveal cracks in the largest economy of the world. Market developments on Monday that may have a significant impact Manufacturing data for October
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Investors reduce rate-cut betting as gold prices rise on stronger dollar
Gold prices held steady Monday as investors backed off their bets on further Federal Reserve rate reductions in the near future. Meanwhile, easing U.S. China trade tensions also dampened bullion demand. As of 0504 GMT, spot gold was unchanged at $4,000.65 an ounce. U.S. Gold Futures for December Delivery rose 0.4% to $4.010 per ounce. The dollar has risen to near a three-month high, and prices have fallen about 9% since the record high of $4381.21 set on October 20. Kelvin Wong, senior market analyst at OANDA, said: "There is a lack in upside momentum for gold due to technical factors. The dollar also remains resilient. This has a negative effect on gold." The Fed cut rates by 25 basis point on October 29, the second time in this year. However, Jerome Powell’s hawkish remarks following that cut cast doubt on further rate easing for 2025. CME's FedWatch Tool shows that traders now expect a rate reduction in December of 71%, down from 90% prior to Powell's comments. Gold that does not yield is a good investment in low interest rate environments and economic uncertainty. Investors are watching other economic indicators, such as the ADP U.S. Employment Data and ISM PMIs, this week to see if they can change the Fed's hawkish position. The safe-haven strategy has decreased at this time due to the de-escalation in U.S. China trade tensions. Wong added that it could be a shift towards a more risky play on the equity markets. Last week, U.S. president Donald Trump announced that he had agreed to reduce tariffs against China in exchange of concessions from Beijing on the illicit fentanyl market, U.S. soya purchases and rare earths imports. The price of palladium fell 0.1%, while platinum rose 1.5%, to $1,590.86. (Reporting by Ishaan Arora in Bengaluru; Editing by Subhranshu Sahu, Ronojoy Mazumdar and Harikrishnan Nair)
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Investors reduce rate-cut betting as gold prices rise on stronger dollar
Gold prices held steady Monday as the dollar strengthened. Investors were reducing their bets on further Federal Reserve rate reductions following Jerome Powell's recent hawkish comments. Meanwhile, demand for gold was also dampened by the easing of U.S. China trade tensions. As of 0250 GMT, spot gold fell 0.1% to $3.997.94 an ounce. U.S. Gold Futures for December Delivery rose 0.3% to $4.008.60 an ounce. The gold price has fallen about 10% since the record high of $4381.21 set on October 20, while the dollar is climbing to a three-month high. Kelvin Wong, senior market analyst at OANDA, said: "There is a lack in upside momentum for gold due to technical factors. The dollar also remains fairly resilient. This has a negative effect on gold." On October 29, the Fed cut interest rates for the second consecutive time by 25 basis points. CME's FedWatch Tool shows that traders now expect the Fed to cut rates in December by 71%, down from 90% before Powell made his remarks. Gold that does not yield is a good investment in low interest rate environments and economic uncertainty. Investors are watching other economic indicators, such as the ADP employment data or ISM PMIs, this week to see if they can change the Fed's hawkish position. Wong said that the safe-haven effect has diminished at this time due to the de-escalation in U.S. China trade tensions. It could also be a rotation to a play with much more risk in the equity market." Last week, U.S. president Donald Trump announced that he and Chinese President Xi Jinping had agreed to reduce tariffs against China in exchange of concessions from Beijing on the illicit fentanyl market, U.S. soya bean purchases, and rare earths imports. Silver spot rose 0.3% per ounce to $48,77, platinum was up 1% at $1,583,28, and palladium climbed 0.4% to $1439.21. (Reporting by Ishaan Arora in Bengaluru; Editing by Subhranshu Sahu)
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Shanghai copper continues to lose money on the back of weak China factory data
Shanghai copper continued to suffer losses from last week, as weak Chinese manufacturing data dampened sentiment. As of 0315 GMT, the most active copper contract traded on the Shanghai Futures Exchange fell 0.41%, to 86850 yuan (12,192.90 dollars) per metric tonne. Benchmark copper for the three months ended at $10,853.5 per ton. The copper price fell as factory activity in China, the world's largest metal consumer, remained low. The RatingDog PMI (Purchasing Managers' Index) compiled by S&P Global fell to 50.6 in the month of October, according to a survey conducted on Monday. This was below the polled expectation of 50.9. The official survey, published on Friday, showed that China's factory activities shrank for the seventh consecutive month in October. The official manufacturing PMI fell to 49.0, from 49.8 in Septembre. After months of trying to get ahead of potential U.S. Tariffs, the reading fell below expectations. The stronger U.S. Dollar also affected the market. This made commodities that are traded in the greenback costlier for investors who use other currencies. Last week, the U.S. Federal Reserve expressed reservations about cutting rates. This raised questions about whether a second cut in December is likely. The Yangshan premium on copper continued to be a factor in the decline of China's copper demand despite high prices. The price of copper, which is a reflection of the demand for it imported into China, was $36 per ton last Friday. This has dropped from $50 per ton one month earlier. Aluminium gained 0.78% among other SHFE base materials, while zinc rose 0.34% and tin grew 0.56%. Lead and nickel showed little change. Monday, November 3 DATA/EVENTS (GMT) 0850 France HCOB Manufacturing PMI Oct 0855 Germany HCOB Mfg PMI Oct 0900 EU HCOB Mfg Final pmi October 0930 UK S&P GLOBAL MANUFACTURING PMI Oct 1445 US S&P Global Manufacturing final pmi Oct 1500 US ISM Manufacturing oct. ($1 = 7.1230 Chinese yuan). Monday, November 3, DATA/EVENTS(GMT) 0850 France HCOB Manufacturing Mfg Oct 0855 Germany HCOB Manufacturing Mfg Oct 0900 EU HCOB Manufacturing Final PMI October 0930 UK S&P Global Manufacturing PMI final Oct 1445 US S&P Global Manufacturing PMI final Oct 1500 US ISM Manufacturing Oct ($1 = 7.1230 Chinese yuan). (Reporting and editing by Dylan Duan & Lewis Jackson.
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China's iron ore prices fall due to declining steel production and rising inventories
Iron ore prices weakened on Monday due to a decline in steel production in China and rising port inventories. There was also concern about a weakening of downstream demand. By 0240 GMT, the most traded January iron ore contract at China's Dalian Commodity Exchange fell by 0.75% to $791 yuan (US$111.05) per metric ton. The benchmark December Iron Ore at the Singapore Exchange fell 0.56% to $105.55 per ton. According to Mysteel, the capacity utilisation rate at Chinese blast-furnace steel producers fell by 1.3 percentage point to 88.6% on average, for the fifth consecutive week between October 24-30. Mysteel's data shows that the daily hot metal production, which is a measure of iron ore consumption, fell 1.5% from one week to another, reaching 2.36 million tonnes. Everbright Futures, a Chinese broker, predicted that overseas supply would continue to improve in November. Shipments and arrivals are expected to increase. Analysts from Galaxy Futures stated that while domestic steel production may improve in the fourth quarter of this year, the main issue is the rapidly declining end-user demand for iron ore. As part of China's government pledge to reduce the overcapacity, China's steel association, which is backed by the state, announced that its steel production would drop below 1 billion tonnes in 2025. SteelHome data shows that the total iron ore stocks across Chinese ports increased by 1.53% in a week to 135.6 million tonnes as of October 31. Coking coal and coke, which are both steelmaking ingredients, have lost ground. They fell by 0.5% and 1.06 %, respectively. The benchmarks for steel on the Shanghai Futures Exchange fell. Rebar fell 0.8%, while hot-rolled coils dropped 0.63%. Wire rod slipped 0.24%, and stainless steel declined 0.59%. ($1 = 7.1230 Chinese yuan) (Reporting by Lucas Liew; Editing by Subhranshu Sahu)
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Sources say that India's BPCL will buy Upper Zakum crude in December to replace Russian oil.
Two trade sources reported on Monday that India's Bharat Oil Corp bought crude oil in Abu Dhabi as part of a spot-tender to replace oil imported from Russia, after the U.S. imposed sanctions against two major Russian producers. They said that the Indian refiner bought 2 million barrels Upper Zakum crude to be loaded in December. ADNOC Trading is said to be the supplier of the cargo, according to a source. Washington imposed sanctions last week on Rosneft, and Lukoil - the two largest Russian oil companies - in an effort to increase pressure on President Vladimir Putin for ending the war in Ukraine. Last week, a BPCL spokesperson said that the company will only buy Russian oil from entities not sanctioned. BPCL purchases 2 million metric tonnes (14,66 million barrels), mainly Russian oil, from the spot markets every month. The source stated that BPCL hopes to continue buying Russian oil through non-sanctioned sources for half of the supply.
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Malaysia PM says $142 Million magnet plant will boost rare earth industry, reports state media
State media reported that Malaysian Prime Minister Anwar Ibrahim stated that the development of a 600-million-ringgit ($142-million) super magnet production facility in Pahang would strengthen the nation's rarity earth sector. In July, Australia’s Lynas Rare Earths signed a contract with South Korea’s JS Link to build a 3,000-tonne neodymium magnetic manufacturing facility near Lynas’ advanced materials plant located in Malaysia’s Kuantan District. Anwar told state news agency Bernama that Malaysia's Trade Minister would monitor the project, as it involves rare earth processing. Anwar stated that "JS Link already bought the land and is ready to start operations. This is no longer a Memorandum of Understanding." The investment has been made, and the land is prepared, so it's about speeding up the process. Anwar stated that the collaboration would help Malaysia to become a leader in advanced materials and clean technologies, as well as support efforts to create a supply chain of critical minerals. According to government estimates Malaysia has 16.1 million tons of rare earths deposits but lacks the technology required to mine and process these. The country seeks foreign investment to mine and process rare earths. Rare earths play a vital role in the production of high-tech products, such as electric vehicles, semiconductors, and missiles. Malaysian officials are reportedly in discussions with China about rare-earth processing. Last month, they signed an agreement with the United States to seek cooperation for diversifying their critical mineral supply chains.
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Investors demand creation of International Minerals Agency
On Monday, a group of mining investors called for the creation of a new independent agency to oversee the sector. This would be modeled after the International Energy Agency. A statement from the group of investors said that they manage or advise assets worth $18 trillion. The new International Minerals Agency will be able monitor global mineral demand and supply as well as illegal flow. It added that the agency would also provide information about how companies are progressing towards global performance standards in sustainability. The Global Investor Commission on Mining 2030 includes PIMCO as well as ING, L&G and Allianz Investment Management. Church of England Pension Fund, Royal London Asset Management and Allianz Investment Management are also members. After meeting with the President of Brazil, Luiz inacio Lula da S Silva, it released a report aimed at providing a 10-year roadmap for a responsible mine sector. This was ahead of United Nations Climate Negotiations. Peter Kindt is the global head of transition accelerators at ING. This will require collaboration between multiple stakeholders and new initiatives, such as an International Minerals Agency. Reporting by Eric Onstad, London Editing by Matthew Lewis
United States southeast deals with difficult task tidying up from Helene; death toll increases
Authorities across a wide swath of the southeastern United States dealt with the challenging task on Saturday of cleaning up from Typhoon Helene, one of the most powerful to hit the nation, as the death toll continued to increase.
At least 43 deaths were reported by late on Friday, and authorities feared still more bodies would be found throughout numerous states.
Helene, reduced late on Friday to a post-tropical cyclone, continued to produce heavy rains across a number of states, stimulating dangerous flooding that threatened to create dam failures that could swamp whole towns.
In Florida's Pinellas County near Tampa, Constable Bob Gualtieri said he had never seen damage like that which Helene wrought. I would simply describe it, having invested the last couple of hours out there, as a battle zone, Gualtieri informed a press conference.
At least 3.5 million clients remained without power throughout five states, with authorities cautioning it could be a number of days before services were completely restored.
Scientists say environment modification contributes to fueling stronger, more damaging cyclones.
Before moving north through Georgia and into Tennessee and the Carolinas, Helene struck Florida's Huge Bend region as a. powerful Classification 4 cyclone on Thursday night, packing 140 mph. ( 225 kph) winds. It left a disorderly landscape of. reversed boats in harbors, dropped trees, submerged cars and. flooded streets.
Cops and firemens carried out thousands of water. rescues throughout the affected states on Friday.
More than 50 people were saved from the roofing of a medical facility. in Unicoi County, Tennessee, about 120 miles (200 km) northeast. of Knoxville, state officials stated, after floodwaters swamped. the rural neighborhood.
Rising waters from the Nolichucky River avoided ambulances. and emergency lorries from leaving clients and others. there, the Unicoi County Emergency situation Management Agency stated on. social media. Emergency teams in boats and helicopters were. performing saves.
Somewhere else in Tennessee, Rob Mathis, the mayor of Cocke. County, ordered the evacuation of downtown Newport because of a. prospective failure at the nearby Walters dam.
In western North Carolina, Rutherford County emergency situation. officials alerted residents near the Lake Tempt Dam that it might. fail, although they stated late on Friday that failure did not. appear imminent.
In neighboring Buncombe County, landslides required interstates 40. and 26 to close, the county stated on X.
WAKING TO DISASTER
The degree of the damage in Florida started emerging after. daybreak on Friday.
In seaside Steinhatchee, a storm surge - a wall of seawater. pushed ashore by winds - of eight to 10 feet (2.4-3 meters). moved mobile homes, the National Weather Service said on X. In. Treasure Island, a barrier island neighborhood in Pinellas County,. boats were grounded in front yards.
The city of Tampa posted on X that emergency workers had. finished 78 water rescues of locals which numerous roads were. impassable due to the fact that of flooding. The Pasco County sheriff's. office saved more than 65 people.
Officials had actually pleaded with citizens in Helene's course to. follow evacuation orders, with National Typhoon Center Director. Michael Brennan describing the storm surge as unsurvivable.
Gualtieri, the Pinellas County sheriff, stated the conditions. prevented very first responders from addressing a number of emergency situation. calls. On Friday, county authorities found a minimum of five individuals. dead.
Two others in Florida passed away, stated Guv Ron DeSantis. Georgia Governor Brian Kemp's workplace reported 15 storm-related. fatalities in that state, while North Carolina Governor Roy. Cooper stated there had been 2 deaths there.
At least 19 people died during the storm across South. Carolina, the Charleston-based Post and Courier newspaper. reported, mentioning local authorities.
(source: Reuters)